Malaysia’s Prime Minster, Mahathir Mohamad, has confirmed that the government will back out of two major infrastructure projects led by Chinese companies due to the expense of the projects, which cost approximately US$22 billion.
The two projects include a new railway connecting Malaysia’s east coast to southern Thailand and Kuala Lumpur.
The $20-billion rail project was given to China’s largest engineering firm, the China Communications Construction Company, and mostly financed by a loan from the Export-Import Bank of China.
The other scheme is a natural gas pipeline costing approximately US$2 billion. Both are part of China’s Belt and Road initiative.
Mahathir is trying to reduce Malaysia’s national debt, which is believed to be around $250 billion.
China’s One Belt One Road scheme has come under criticism, with RWR Advisory Group, a US-based consultancy, revealing that projects worth $419 billion, or 32% by value of the total in Belt and Road countries since 2013, have run into issues such as performance delays, public opposition or national security controversies.